Rupiah Under Pressure on MSCI Downgrade Concerns
The Indonesian rupiah weakened past IDR 18,050 per U.S. dollar on Friday, its weakest level since early August, after MSCI questioned Indonesia’s emerging-market status. The index provider flagged dysfunction in local markets and outlined a possible shift to standalone-market classification, which could trigger capital outflows. The prospect added pressure on the currency amid persistent volatility. Meanwhile, Bank Indonesia will hold a policy meeting next week. The central bank has kept its key rate at 5.75% for three straight months through September, following cumulative hikes of 100bps in May and June, while continuing forex intervention to support the rupiah. September inflation accelerated to 3.28%, driven by persistent pressure from food prices. Globally, the dollar index eased but remained firm near 102, as resilient U.S. data reinforced expectations of further Fed tightening. For the week, the rupiah lost around 0.4%, reversing gains in the previous two periods
The Indonesian rupiah weakened past IDR 18,050 per U.S. dollar on Friday, its weakest level since early August, after MSCI questioned Indonesia’s emerging-market status. The index provider flagged dysfunction in local markets and outlined a possible shift to standalone-market classification, which could trigger capital outflows. The prospect added pressure on the currency amid persistent volatility.
Meanwhile, Bank Indonesia will hold a policy meeting next week. The central bank has kept its key rate at 5.75% for three straight months through September, following cumulative hikes of 100bps in May and June, while continuing forex intervention to support the rupiah. September inflation accelerated to 3.28%, driven by persistent pressure from food prices. Globally, the dollar index eased but remained firm near 102, as resilient U.S.
data reinforced expectations of further Fed tightening. For the week, the rupiah lost around 0.4%, reversing gains in the previous two periods